Trading Pairs

Adam Hewison at INO.com made a video on the changing relationship between AAPL and RIMM. He details a trading strategy called pair trading or trading pairs.

What trading pairs means is that you buy one market while going short the other market in the same sector. Now AAPL and RIMM are battling it out right now in the smart phone sector. It remains to be seen who is going to be triumphant in this battle but it would appear as though Apple may have the upper hand. Trading pairs is what many professionals do when they are unsure as to the direction of the general market but feel pretty comfortable in their analysis of the relationship between two stocks.

The video is free to watch and there is no need to register.

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